Ok so support helped me figure this out.... Ill post here for others:
Make sure no red lights appear on your USB->Variax cable. It should have two bright flashing green lights.
You need to power your guitar for workbench HD to see it. The provide USB will not provide power over ethernet (unlike say the firehawk). To do this, ensure your variax battery is charged and installed, and then just plugin in a cable to the guitar's 1/4" amp jack (amp not necessary, just plug in a cable). As soon as you do this, the guitar powers itself up using its battery and both lights on the USB to variax box will turn green and all is well.
Its very weird this is not mentioned by the workbench app itself when you scan for your guitar and the dialog says 'no guitar found' or some such. It should suggest this step.
dugbug's post in workbench HD fails to connect to variax was marked as the answer